Archives for December 2012

Our firm recommends that each of our clients filing for bankruptcy obtain a credit report for the reasons listed below. If you are married, we recommend obtaining credit reports for both you and your spouse.

You can obtain a truly FREE credit report at AnnualCreditReport.com Any credit reporting service that requires you to enter credit card information is NOT free.

1. Obtaining a credit report helps us get accurate creditor names, addresses, types of debt, balances due and account numbers.

2. Through your credit report we may find creditors whom you have overlooked. It is important that we find out about all debts you owe.

3. Credit reports can alert us to judgments filed against you.

4. Credit reports can alert us to liens against your property.

5. We may find out about co-signers to some of your debts, which are important to list in a bankruptcy.

6. If you are married there may be surprising items on your credit report or your spouse’s and the reports can help us determine whether you should file individually or jointly.

7. We may find out about debts created by a former spouse who many have forged your signature to obtain credit.

8. Credit reports can alert us to mistakes on your credit record. This way you can contact the credit bureaus to correct any mistakes or provide updated information.

9. Credit reports often contain the names and addresses of collection agencies representing creditors and we can notify these collection agencies about the bankruptcy so that collection efforts stop.

10. If the IRS has a tax lien on your property the credit report will alert us so that it can be dealt with properly.

11. Knowing what is on your credit report can help you get credit approval for important purchases after your debts are discharged.

Not every creditor reports to a credit bureau so your credit report may not list all debts. You should let us know of any debts you are aware of so we can be a thorough as possible.

Lien stripping is a way of eliminate second mortgage and/or home equity lines. With the decline in housing values, lien stripping has becomes more prevalent in Chapter 13 bankruptcy filings.

A lien strip allows us to transform a secured second mortgage or home equity line of credit into an unsecured debt, thereby eliminating a monthly payment and reducing total debt by tens of thousands of dollars.

Let’s say that your home is worth $250,000 today. When you purchased it you paid $450,000. Since then the housing market tanked. Now your home is worth much less of what you paid for it. Your mortgage balance is $370,000 for your first mortgage and $56,000 for your equity line. Your mortgages are considered “underwater” as your amount owed is more than your home is presently worth. In your Chapter 13 bankruptcy we would ask the bankruptcy court to “strip away” the second mortgage since all of the value your house presently has is tied up with your first mortgage. In other words, if you were to sell your house, the first mortgage lender would not be paid in full and the second mortgage lender would get nothing. The second mortgage lender is, therefore, considered unsecured.

Remember this only works when:

You are a debtor in a Chapter 13 case

The mortgage loans are in your name

The fair market value of your house is less than the balance due on your first mortgag

We can provide you much more detailed information during your free consultation. Call today! Let us help you take back control of your life and financial future!